The great crowdfunding experience
What a month of September it has been. As some of you may have heard, we have successfully crowdfunded our seed round with an incredible overfunding amount of £734k. It was really busy and tiring but, now we’re on the other side, we feel extremely happy and pumped up!
To crowdfund or not to crowdfund?
I went to a crowdfunding course back in December last year to find out about crowdfunding. At the end of the course, I was convinced that crowdfunding was not for my company. I had in mind that crowdfunding was more suited for a company wishing to develop a product from a blank sheet of paper. We had a product and we had customers, I wanted to go down the “traditional” way: finding investors and close the round outside the public. I was wrong, as you’ll discover below why.
Angels, VCs and family offices
I spent a few months tweaking, training and polishing my pitch. I went around and pitch our project to angels, VCs and family offices. It all went well, people generally resonated with the project but I only managed to secure about a third of the money in 2 months.
We discussed crowdfunding again internally and, coincidentally we got accepted on the Crowdboost programme. It’s a programme run by Virgin Startup that coaches companies on how to run a crowdfunding campaign. I was stupid enough to hesitate to go on the course (I thought it would take too much time away from the business) but in the end, I thought I’d give it a go.
Preparation is the key
The programme runs for 1 day a week for 7 weeks and is tailored to make you “crowdfunding” ready. Each week has a separate topic, you have homework to do, like reword my essay and you have other entrepreneurs who talk about how they “crossed” the line (read: they have crowdfunded successfully). The programme is really good, you meet amazing people and, if you follow what they say to the letter it will definitely increase your chances of success.
One of the biggest lessons I learned from this programme is that preparation is everything. I thought naively that crowdfunding was simply putting your pitch out there and wait for the money to pour in. How wrong I was. Putting your pitch online is probably the easiest bit in the process. What really matters is that you know your stuff inside out: from your valuation to your video and your social media campaign, everything must be spot on.
When the big day arrives, you put your pitch in private mode so only people with the URL can invest. In our case, it’s been amazing and we managed to secure more money in 4 days than we did in the last month. Friends, customers, employees, business partners, everyone was investing in the pitch! We then went live to the public and we overfunded our £200k target in 9 hours.
One of my biggest fear by choosing the crowdfunding route was that you’re going public. It can be extreme: if you succeed then all is good, people take notice and everyone (somehow) knows about your success and congratulate you. On the other hand, if you fail, then it’s not great. People take notice and everyone (somehow) will know that you haven’t made it. Not to say it’s the end of the world but it certainly won’t do you a favour.
At last, it’s over
We left our pitch live until the end of the 28 days to reach £734k. We were happy but exhausted. As like any funding round, it’s a full-time job to raise the money, be on point, answer questions, get the paperwork ready, solving issues, etc….
I was finally able to re-focus on the business after the campaign ended and I almost forgot what it was like not to work on the fundraising!
I like to compare crowdfunding to the Coliseum: you get in it and everyone watches your battle. Pretty much anyone (including your competitors) can go into the details of your pitch, the very heart of your project and challenge you on a very fundamental number or the most ridiculous aspect of it. But it doesn’t matter because everyone watches and check how you react and what your answer is. That’s why you need to be extremely well prepared and get a thumb up.
What I really liked is the timeboxed aspect of crowdfunding. You’ve got 28 days and at the end of it, you know if you’ll get your money or not. Outside crowdfunding, chasing investors/VCs/family offices can be extremely time-consuming. Closing a round can take months and be, unfortunately, lethal for some startups. Not to mention that if you got a few parties wanting different terms in their sheet the process will drag on even more.
I’m glad we chose to crowdfund because it brings something that no other funding route offer: You get a lot of marketing throughout the campaign. because of the very nature of crowdfunding, thousands of people hear about you, hundreds will invest in your pitch and many more will talk about you. When I reflect on it, crowdfunding should have been a no-brainer for us because we offer consumer products and I believe crowdfunding is especially well suited for consumer products and services.
I would also like to take this opportunity to thanks all the investors that have believed in us. I’m glad that you are now part of this great journey!